Impact Of China’s Outward FDI On Firm Performance

With the advancement of economic globalization, the rapid development of market economy, capital flows increasingly frequent between countries, foreign direct investment plays an increasingly important role in the global economy. In order to gain considerable development and seize huge share of the international market, FDI has become the Chinese enterprises to go out just like an important channel. However, with the rapid development of China’s FDI enterprises deviate from this situation is that the Chinese enterprises has faced a variety of problems in the process of going out, especially serious is that the size of FDI and corporate performance unbalanced. According to the fifth annual meeting of the international financial market analysis data show that 70% of the Chinese FDI enterprises is a loss. This grim status quo has caused widespread concern in government and enterprises. So, whether China’s outward FDI would affect the performance of the enterprise or not, which is an urgent problems to be solved in this article.This paper carry out following path:Firstly, the existing the relationship between FDI and corporate performance, the factors of outward FDI performance were summarized and give a brief comment. Secondly, the description and analysis of the relevant theory which is used about outward FDI impact on corporate performance.Then, I selected the listed companies as the research sample. Taking into account the heterogeneity among enterprises, the author divided the sample into the manufacturing and non-manufacturing, and the use of multivariate statistics method for manufacturing and non-manufacturing enterprises samples were statistically described. Again, put the 367 FDI enterprises as a specific research samples, taking the empirical analysis of panel data. Given the time lag effect of FDI may exist, the paper studied the effects of current and lagged effects of outward FDI on firm performance, and comparative analysis of the different sectors of FDI activity in high-income countries and low-income countries whether they would have different effects on corporate performance or not. The empirical results demonstrate there are some similarities and differences between the manufacturing and non-manufacturing.Consistency is reflected in:the impact of FDI on corporate performance are negative lag effect, and whether it is to invest in high-income countries or low-income countries, the lagged effects of the impact of FDI were greater than(or not less than)the current effect of FDI affected. Differences reflected in:the specific impact of FDI about performance in manufacturing and non-manufacturing enterprise is different. Finally, based on analysis of previous studies, the authors propose appropriate policy recommendations for China’s outward FDI enterprises.